Naspers takes Tencent stake out of Africa with Prosus listing

AMSTERDAM (Reuters) - South African e-commerce group Naspers (NPNJn.J) is listing its global empire of consumer internet assets under the name of Prosus (PRX.AS) on Wednesday - and the jewel in the crown is a 31% stake in Chinese tech titan Tencent (0700.HK).

FILE PHOTO: A sign of Tencent is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 3, 2017. REUTERS/Aly Song/File Photo

The spin-off in Amsterdam marks the end of an era for Naspers as it looks to move beyond the legacy of former Chief Executive Koos Bekker’s prescient investment of just $34 million in Tencent when it was a startup in 2001, one of the most lucrative bets in corporate history.

The stake in Tencent, the world’s biggest videogame company and home to the hugely popular WeChat social media platform, is now worth $130 billion and has buttressed Naspers’ rapid growth towards becoming Africa’s most valuable listed company.

In a statement, the Euronext stock exchange gave an indicative price of 58.70 euros per share for Prosus, implying a market value of 95.3 billion euros ($105 billion) in one go.

That would make it the third-largest stock on the Amsterdam exchange after Shell (ASML.AS) and Unilever (UNA.AS), and Europe’s No.2 tech firm after Germany’s SAP (SAPG.DE).

European players are still, however, dwarfed by the likes of Facebook (FB.O) and Amazon (AMZN.O) in the United States.

The indicative price is based on Naspers’ closing price in Johannesburg, with trading in Prosus set to start on Wednesday morning in Amsterdam.

The Tencent stake has been worth more than Naspers itself for years, and dominated the $103 billion group’s finances. One motivation for spinning off Prosus is to narrow that value gap.

One reason for the discount is Naspers’ heavy weighting on the Johannesburg Stock Exchange.

The stock currently represents around a quarter of the value of the shareholder-weighted top 40 index, which makes it difficult for index investors attempting to limit their exposure to a single share.

The Prosus listing should see about a quarter of Naspers’ value move to Amsterdam.